April 1, 2011


Do not sit down and enter a position right away- see what is going on first

Do not fight the trend- wait for indicators of a reversal such as increase in volume, technical indicators- double top or bottom,

After a successful trade and the stock settles down- wait for it to show you something before entering into the same position as before because you think you are going to miss the “real move”

Do not initiate a position at the resistance or support- instead wait for it to break the level then get involved ( do not buy hole numbers or other such levels unless you are adding to a position)

If the market is quiet be more selective about trades to enter because you will get jigged out and end up paying spreads and not being confident enough to hold the position even if you are right

Make each trade count- do not enter a position without knowing why you are involved- have a reason: market movement, tops, bottoms, increase in volume, levels

Do not chase a stock as it is moving unless you are adding to an established position; instead, wait for the pullback and when the stock settles down and it looks like a promising trade then get in

Do not get frustrated and try to fight a trend and keep shorting into an up move or vise versa and then decide to flip especially when nothing is going on- be selective, keep your cool

Try to choose one way and stick with it instead of going back and forth, but if you are wrong do not hesitate to rethink your strategy

If you are playing a stock based on hidden buying and selling- not in the book then be more patient. Take one long position from a good entry point and hold onto it rather than constantly getting in and out- churning

Do not trade if you are in the wrong frame of mind

If you start off the month on a bad note do not try to make it back in one day…have one solid day and build off that

Identify a trend in the market and the sector and stick with it until you see a real reversal- use the pullback as entry points of following the trend instead of thinking every small move up or down is the beginning of a reversal

When choosing tops or bottoms, be quicker to hit out when things go against you because the trend is still holding

Use the 50 day EMA to identify trends in the stock- it will act as support or resistance and once it breaks to the other side the stock should start to move

Stock selection is key- do not get hung up on one stock if you are unable to make money in it

After making a nice push in the morning do not be afraid to stop trading- and if you do decide to trade- pick your spots better and have a real plan instead of doing random trades

If you are going to trade a volatile stock like PD, do not protect your PL when you trade or else the risk your taking on is greater than your reward

Do not base your trades on news that you read. If the stock shows you otherwise then trade the stock accordingly instead of sticking with a bias. Use the news as a guide but do not base trades on it unless it is confirmed by the stock itself

Resist the urge to trade stocks that you have not been carefully watching

If you make a good trade in one direction and get out successfully, then try to get back in on the same side and it doesn't work- do not continue to do it- instead, wait for the stock to show you that the trend is continuing and then get involved

Use volume as an indicator of overall market activity

When volume is lower than usual it means that institutions are not active and stock moves will trend less and have little follow through

When volume is lower be quicker to scalp and do not get involved as much because although the futures may be swinging the stocks will not react and it will cause you to write tickets and lose money by paying the spread only causing frustration

Track the volume of the stocks you follow for periods of the day- such as how many shares until 11, until 12, etc.

On slow days, be quicker to switch to another stock/sector. Don't let pride hurt your trading

On slow days, if you get off to a bad start and then make half of it back- take that as a positive and stop trading...However, if the market is active and you get burned early, refocus and carry on trading normally

If you lose on your first few trades take a step back and understand what you are doing wrong instead of repeating the same thing over and over

Do not flip in between stocks- if you are trading poorly in one, then switch- if you succeed in the new stock do not go back to the other one unless you think you have reevaluated it enough to be able to trade it successfully

Do not make trades hoping for a miracle by getting into massive size for no reason

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